Fed Rate Hike Odds Surge to 82% Amid Macro Economic Shift
A sharp macroeconomic shift on July 24 has forced crypto traders to rapidly recalibrate their interest rate expectations. The Federal Reserve's probability of a rate hike later this year jumped to 82%, up from less than 53% just one week ago.
Stronger-than-expected labor data and climbing energy costs have pushed the probability of a Federal Reserve rate hike, with futures markets indicating a 38% chance of a 25-basis-point increase at next week's meeting.
The tight labor market has allowed policymakers to prioritize inflation control, pushing the two-year Treasury yield up by five basis points to 4.363%. Despite this hawkish shift, analysts project that federal funds rates will peak in September with up to 50 basis points of rate cuts in 2027.